......In fact, during the Indian microfinance crisis, I realized that India’s central bank (Reserve Bank of India) perhaps did not have (in one place) all the requisite information with regard to foreign equity and debt flow into the Indian microfinance sector. And as I have previously mentioned, (and as Mix Market has so eloquently put it), it is the unique combination of significant equity flows (and debt funds) from abroad with local banking funds and their subsequent and continuous investment as “microfinance loan assets” that created the perfect storm for the Indian microfinance crisis. It is precisely this that regulators have to guard against globally.........
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Somewhere we should draw a line as to what extent and for what purposes we should depend on foreign funding. Countries which have up to Rs25 lakh per capita public debt(Government borrowing) are offering 'soft' loans for various purposes to India. High time we had a re-look at our priorities. Where possible we should try and use our internal resources. This applies to gold, this also applies to borrowing for lending under Microfinance initiative. For the later, there is no better way than revitalising Indian Cooperative Movement.Immediate response would be, cooperatives are contaminated by political interference. Space allows me only to mention that inside politics should be seen as a better option than interference in every policy by foreign lender.
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